Many bonds are callable, which means they can be repaid early by the borrower after a period of time for a pre-agreed price. The Call Schedule describes the Call Protection and Call Premiums that are applicable for that bond.

Call Protection

Limits the borrower from calling the bond for a period of time, typically half the term of the bond. For example, a 10-year bond will typically have five years of call protection.

Call Premiums

These come into play once the period of call protection ends. For high yield bonds the premium on the first call date is usually par-plus-50% of the coupon, declining in a linear fashion thereafter each year.

For example, a 9% bond due in 10 years with five years of call protection would typically be callable at 104.5% of par upon the fifth year outstanding, then at 103%, 101.5% and par in the following years, representing a par-plus-50% coupon, 33%, 17% and par.

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